Conferences at Department of Economics, University of Toronto, Canadian Economic Theory Conference 2014

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A Characterization of Rationalizable Consumer Behavior

Philip J Reny*

Last modified: 2014-04-05

Abstract


For an arbitrary dataset, finite or infinite, it is shown that the following three conditions are equivalent. (i) D satisies GARP; (ii) D can be rationalized by a utility function; (iii) D can be rationalized by a strictly increasing, quasiconcave utility function. Examples of infinite datasets satisfying GARP are provided for which every utility rationalization fails to be lower semicontinuous, upper semicontinuous, or concave. Thus condition (iii) cannot be substantively improved upon. 


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